Prospects for office properties: The future lies in hybrid concepts, space efficiency and new uses

The change from monofunctional office properties to mixed-use properties, such as the "Am Holstenwall" refurbishment, is a key lever for sustainable projects. The European real estate company Covivio is pursuing a strategy of functional opening of classic office properties in the Düsseldorf project "ICON by Covivio", among other things. The integration of gastronomy, service offerings and supplementary uses creates a multi-use concept for the iconic listed property from the 1970s, which aligns the property more closely with the needs of the users and increases its long-term marketability.

Katharina Greis, COO Offices at Covivio Germany, says: "For us, multi-use concepts are not an add-on, but a central component of modern office developments. With our hospitality approach, we are specifically transferring service and amenity qualities from the hotel industry to office properties, for example through concierge services, digital service offerings or curated common areas. In this way, we are consistently aligning the space with the needs of the users and keeping it competitive in the long term."

However, not every property can be economically stabilised by expanding space or multi-use concepts alone. Especially with large-volume developments, classic office approaches are increasingly reaching their limits.

Ingo Lindner, Managing Director of FAY Projects, describes this using the example of the Stuttgart project "CANNION", which was originally designed as a classic office development: "We had to realise that classic office space of this size could no longer be placed as planned under the current market conditions. The decisive step was to consistently question and realign the concept."

The project with around 27,000 square metres of gross floor area above ground will therefore be repositioned in the course of development. Instead of a monofunctional office use, FAY relies on a mix of uses consisting of office, hotel, gastronomy and fitness. The concept is supplemented by long-stay offers, which are primarily in response to the increasing demand for flexible forms of living and working.

Approaches go even further, in which office properties are completely removed from their original use. Particularly in the case of structural vacancies or properties that are no longer marketable, the focus is on conversion to alternative uses.

Jens Fieber, Managing Director of HIH Projektentwicklung (HPE), says: "Not every office property has a future as an office. But many buildings have qualities that are very suitable for other uses, such as education." In Hanover, HPE is pursuing corresponding approaches. Here, a school is being developed from a former office on an area of more than 16,000 square metres on the listed former HANOMAG site. CELLS is also demonstrating how a transformation into a school campus with capacity for several thousand pupils can succeed with the conversion of the former headquarters of Deutsche Börse in Frankfurt am Main, the "Lateral Towers" with 46,000 square metres of rental space, into a complex with three schools. The last construction phase will be handed over to the city of Frankfurt at the end of May.

At the same time, the restructuring of stalled project developments is gaining in importance. Especially where projects have to be rethought as distressed assets as a result of changed market conditions, complex financing structures and too little letting. One example of this is the KORYFEUM project in Unterschleissheim near Munich. HPE has taken over the restructuring mandate there. Together with HIH's Asset Management, the original overall concept will also be readjusted and vacant space in the office buildings that have already been realised will be rented: Contrary to the original plans, the still undeveloped areas will no longer be completed with additional office buildings, but with alternative uses, such as those from the light industrial segment.